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"Think Global, Act Global"
25 August 2011
“Think global, act local\" is a phrase often associated with environmental and social movements. Surprisingly, for me it also resonates with export planning. In a single sentence it captures both the aspirations and the tactics needed for many export businesses to grow - whether you are a two-person, family-owned internet business or a large-scale building company.
So if exporting is the right way to grow and strengthen a business, what tactics are needed to \"act local?\"
Many businesses will first think about their marketing materials - translating them into the local language, tweaking colours, images and messages to ensure they're appropriate and appealing. They might also look at setting up international 24/7 phone lines, multi-language, multi-currency websites, engaging local distributors or other in-market partners.
Companies' first thoughts are seldom about setting up a physical presence in their target market. But for many businesses, this approach can deliver a more effective market-entry process and a quicker, more sustainable market penetration.
In trying to work out if it's the right market-entry method for your business, carefully consider your key reasons for setting up a physical presence versus selling directly from your home country.
Are you trying to:
- avoid market entry barriers on imports, such as high tariffs
- reduce freight and production costs
- 'buy in' new technologies or products to help you keep your business edge
- speed up your average time-to-market or access to distribution links
- improve customer service by providing local after-sales service
- increase sales by getting real-time market intelligence and access to potential customers
- access venture capital funding, research and development or skilled labour?
Importantly, consider the elements of your business model you most need to control. If you are happy with someone else, or even several someones, making decisions on your pricing, promotional efforts, after-sales service, logistics etc. - then you probably don't need a physical presence.
But if some of these elements are vital to your long-term plans, don't delay a physical presence until much later, consider it early, if not first.
Setting up overseas might seem expensive, complicated and scary. It's often seen as an option only for big, experienced, cashed-up companies with a legal team larger than your extended family tree.
But setting up a physical presence in a target market doesn't have to be the whole 'name on the building' experience; it can be small, flexible and reasonably inexpensive.
Many bilateral business chambers, incubators and office precincts offer 'soft-landing' packages in overseas markets. Typically, this is free office space, often for one or two people for three to 12 months.
If you want a more professional profile from day one, consider using serviced office facilities from a global provider. You could also co-locate with other smaller firms trying the same thing from your home country. They're easier to find than you think, especially if you tap into the relevant bilateral chambers, Embassies and Commercial Government Trade Agencies operating in your target market.
So don't let misperceptions hold you back. If you're thinking 'global', it might be well worth a look at becoming a local!